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Is PropTech driving change in real estate?

Posted on 09 February 2017 by Susan Freeman

Is PropTech driving change in real estate?

The property sector has been a little late to the party as far as the potential of tech is concerned. At a recent Estates Gazette proptech seminar – hosted appropriately at U+I’s splendid new space in Victoria – tech and property sat self-consciously side by side. The audience was treated to the thoughts of a selection of disruptive businesses intent on shaking up the property sector.

A keynote from Charlie Farr, Property Acquisitions Manager of restaurant delivery company Deliveroo, detailed the company’s huge reach – it now employs a massive 20,000 drivers globally. Data is key to this business, as it is to the other tech companies we heard from. To tackle the next frontier of bringing new restaurants to underserved areas, Deliveroo has set up the Roobox concept – a kitchen without any restaurant attached which is designed to fulfil delivery orders. This is akin to supermarkets’ “dark stores”, with shelves of products for online orders but no shoppers.

The new concept will operate across the UK. Some of the participating restaurants mentioned – such as Sushi Samba and Trishna – are amongst my favourites so I await further news with great interest. Roobox is working closely with landlords to access the right properties.

Next up was some impressive under 30 tech talent, chaired by Estate Gazette’s Emily Wright. The panel included Chlump Chatkupt of Placemake, Ross Bailey of Appear Here, Savannah de Savary of Industryhub, James Morris Manuel of Matterport, William Newton of WiredScore and Jon Taylor of The Collective.

Ross Bailey founder of ‘airbnb for retail’ popup company, Appear Here didn’t hold back as he described the property industry as ‘inefficient and old fashioned’.

One panel member called for ‘more partnerships between property and tech, more collaboration’. It was suggested that ‘proptech’ is too limited a term as it can relate to logistics, valuation etc.
The panel were asked if they came across a lot of fear around technology. For instance, were people afraid of losing jobs? The feeling of the panel was that fear is dissipating although it’s not clear that the property sector at large would agree. Chatkupt said he didn’t see much fear. He did see excitement about the future though. He said we must think long term as we won’t be going back to how things were.

Bailey commented that he expects competition between property companies to emerge, which will force the slower adopters to follow suit as those with the most data will do better deals.

Brandon Weber, fresh from brokering a merger between his property data company Hightower and VTS, gave the next keynote. Illustrating the size of the newly combined company, he said it now employs 72 software engineers. He echoed comments about the property sector being slow to adopt tech. He sees the property sector as ‘a big group of entrepreneurs who want to invest in ROI’. Therefore proptech companies must focus on defining the business problem to be solved. In his view, the industry has been underserved by tech in the past. He homed in on inadequate customer service standards and said that tenant satisfaction surveys are key to property owners. He expects the tenant experience will change dramatically (hopefully for the better!) Data, said Weber, will bring predictive analysis into the workflow.

When questioned on the cultural differences between the UK and US property sectors, Weber said that in the UK we are more team orientated. He sees more collaboration within London brokerage firms. He believes that tech-driven property is on its way. He has built his business in WeWork and expects to see alternative solutions to dynamic tenants’ needs. The trigger points will be how landlords address these needs. There was some discussion about how fast the property sector will need to travel in order to play catch up with other sectors. Weber suggested that we need to travel 26 years in order to regain lost ground! He also believes we need to achieve this in the next five to six years. Artificial Intelligence and machine learning will have an impact so that in five years’ time ‘the industry will look very different, better’, he promised. He also anticipated that in the next 18 months thought leaders will emerge in #proptech. ‘It is an exciting and dynamic time’ he concluded.

It’s an interesting time for proptech so let’s watch this fast moving space carefully for our new thought leaders to emerge!

Then for the property panel chaired by Damian Wild: Jacob Loftus, Juliette Morgan, Ben British Land, David Rosen Pilcher Hershman

Ben admitted there was some truth in the criticism of real estate but there was the potential to move quickly now.

Jacob Loftus spoke of the poor experience for tenants and lack of transparency. The developer/customer relationship is being challenged by VTS.

Juliette Morgan talked of the potential to use tech around planning and consultation which could give better visualisation of how a scheme will look.

Ben of British Land said everything is moving faster. He is now looking for a return on systems in 12 months rather than three years as previously.

Damian Wild asked if this meant the end for traditional surveyors. Rosen felt that institutions will have to wake up and value differently. Morgan felt that there will be more AI and predictive valuations which will affect traditional surveying skills. The panel stressed ‘it’s happening now’ and spoke of a seismic shift beginning now which brings a need to live with it and skill up.

Since the seminar I have had the opportunity to meet the latest cohort of proptech startups at the PiLabs specialist incubator. These fledgling businesses have great ideas aimed at improving the efficiency of various aspects of real estate, ranging from security to construction and from concierge services to storage. The opportunities for proptech are limitless.

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